Adelaide saw an increase in loss-making resales: CoreLogic Pain & Gain

Adelaide saw an increase in loss-making resales: CoreLogic Pain & Gain
Adelaide saw an increase in loss-making resales: CoreLogic Pain & Gain

Over the March quarter, Adelaide saw an increase in the portion of loss-making resales, with 10 per cent of properties seeing a nominal decline in the sale price, according to CoreLogic's Pain and Gain March Quarter 2020 report. 

This is a reversal of the trend seen in the December quarter, where loss- making sales had seen a consistent decline since September 2019.

Despite the increase in loss making sales, there were still pockets of the Greater Adelaide region where over 90.0 per cent of properties yielded a nominal gain. These include Tea Tree Gully, where 95.1 per cent of properties saw a profit, based on a typical hold period of 11.2 years. The median gain in the area was about $116,000.

Adelaide saw an increase in loss-making resales: CoreLogic Pain & Gain

 

Source: CoreLogic Pain and Gain March Quarter 2020 report.

The lowest portion of profit making sales across Adelaide was in the City of Adelaide. 22.8 per cent of sales in the quarter saw a decline in the resale price, based on a median hold period of 9.0 years, and typical losses were $30,000.

The Adelaide dwelling market faces some headwinds in terms of persistently high levels of unemployment, which has only been worsened by the onset of social distancing measures in response to COVID-19. As of May 2020, South Australia continued to see the highest rate of unemployment of the states and territories, at 7.2 per cent.

Low interest rates and strong rental yields across the Adelaide dwelling market have continued to support growth in the Adelaide property market, which was up 0.7 per cent in the June quarter, but momentum in the growth rate has been slowing over time. The incidence of profitability in resales is likely to slip further over the coming months, until the lifting of social distancing measures sees a material improvement in the labour market.

Adelaide saw an increase in loss-making resales: CoreLogic Pain & Gain

Source: CoreLogic Pain and Gain March Quarter 2020 report.

Tags: 
Adelaide Corelogic Pain & Gain

Comments

Be the first one to comment on this article
What would you like to say about this project?